Disability Pensions in Australia: Where entering into a Relationship can be a Poverty Sentence

 

Dr Tristan Ewins

It is generally quite difficult to obtain a Disability Support Pension in Australia.  There are job capacity and impairment tests ; and many who are significantly impaired miss out.  But there is another problem that has been neglected in most debate.  Pensioners generally are assessed differently if they have a partner.  The consequence of this is that there is a perverse incentive for pensioners not to enter into a relationship or marry.  With the Disability support pension there can be a loss of income of around $200 a fortnight as a consequence of entering a relationship or getting married.  If the partner has a high income that is one thing, but many such couples could both be on low incomes or welfare.  Also: even if a person’s partner has a higher income, there is a problem with reinforcing dependence: with inhibiting the independence of Disability and other Pensioners.  When combined with other government measures: such as running a trial of the Indue Cashless Debit Card, or attempting to claw back money from the National Disability Insurance Scheme, it is clear we have a government which is trying to implement austerity aimed at the most vulnerable. 

The bottom line is that these arrangements condemn hundreds of thousands of disabled Australians to probable isolation and loneliness ; where they must fear the financial consequences of having relationships.

At the same time, Medicare is under attack.  Labor MP in Bendigo, Victoria, Lisa Chesters has observed how recent cuts to Medicare will “radically alter the cost of hundreds of orthopaedic, cardiac and general surgery items. “  As Chesters explained: “Patients now face the prospect of life-changing surgeries being cancelled at the last minute or being  landed with huge bills they didn’t expect.   And yet these matters have received very little attention in the mainstream media.

We need a Labor Opposition which defends Medicare and the National Disability Insurance Scheme. (NDIS)   But we also need a Labor opposition which goes beyond the strictly defensive ; and comes up with innovative and ground-breaking measures to extend the social wage and welfare state ; along with legislated wage increases for those on low incomes. 

This would inevitably involve tax reform. Ideally Labor should be aiming to reform progressive tax to the tune of 5% of GDP over 10 years, or at least three terms of Federal Government.  This would bring us closer to OECD average levels of tax and social expenditure.  Rolling back unfair means testing of pensions – including Disability Pensions - would empower hundreds of thousands of women and men with greater independence ; and if we are concerned about equity we need to reform tax in other areas for people with higher incomes.  It would also empower those people to enter into relationships without fear of destitution. Eligibility tests should also be relaxed so those incapable of full time work are not threatened with exclusion. 

The ‘LIFE’ (Living Incomes for Everyone) campaign is demanding a minimum $550 a week for all.  This would mean a great deal for job-seekers living in poverty, especially if combined with other measures like investment in public housing.  Effectively it would mean a guaranteed minimum income. (GMI)  Disability pensions specifically should increase further - by at least $150/fortnight in any case – rising to about $1100/fortnight.

No-one should be in the position of having to say they ‘cannot afford to enter into a relationship’.  The NDIS, despite its faults, was a big step forward for disabled Australians.  Instead of panicking over the cost we need to accept that providing services for these people meets what is perhaps the most defensible socialist principle: that each should contribute what they can, and receive what they need.  This principle needs to become a society-wide ‘common sense’ so that they are accepted even by many Conservatives ; as for instance occurred with the issue of Marriage Equality for those in the Queer communities.  But ironically there is no real ‘marriage equality’ for all if some need fear being thrown into poverty should they enter a relationship.

Progressives need to agitate to make this a real issue in the upcoming Federal Election.  The advocacy of Julia Gillard and Bill Shorten was crucial for the initial implementation of the NDIS.  The NDIS is not perfect, but is a vast improvement on the vacuum that existed beforehand.  Now we need additional policy champions within the ALP agitating to take the reform process further.  The Labor Aged-Care and Welfare Movement (LAWM) has adopted this as one of its objectives.  But we need more avowed Labor members to join our Facebook Group ; and to advocate for change.  Much as has happened with Rainbow Labor, Emily’s List, Labor for Refugees, and LEAN.  (Labor Environmental Action Network)  Currently LAWM exists at the level of Facebook ; but over the long term we want to achieve much more.  If you’re a Labor member and haven’t joined LAWM yet, pls do so.  And for Bill Shorten, Julia Gillard and others: Please take up this cause and make it an issue for the upcoming Federal Election.

Scott Morrison’s 2017-18 Federal Budget: Some Good Measures Amidst the Typical Austerity

Admist the Usual Austerity there are some Welcome Surprises in this 2017 Morrison Federal Budget. Though the monopoly mass media is tending to overstate any perceived 'leftward shift' ; inappropriately using terms like 'Labor lite' , where in reality there are very significant assaults on the rights of students and job seekers.

by Dr Tristan Ewins, 10/5/2017

Many media commentators are responding to the 2107-18 Morrison Federal Budget by branding it as ‘Labor Lite’ or ‘worse’.  But how much of that actually stands up to scrutiny? 

Yes the Government is attempting to appear ‘fair’.   And many media figures are throwing around terms like “cash splash” which are commonly reserved to use against Labor governments.  There are pressures in the right-wing monopoly mass media for a ‘right-turn’ in response to any moderation of economic policy under Turnbull.   Bernardi’s ‘Australian Conservatives’ and the libertarian ‘Liberal Democrats’ stand to gain most from this.  But despite years of conditioning from the monopoly mass media Australians may resist these trends given the remnants of our ‘egalitarian spirit’.   The point of all this appears to be stigmatisation of social investments and expenditure ; ultimately leading to a US-style political culture.  Which in turn would support a US style class system based on the absolute destitution of many , and the blatant exploitation of a class of working poor. To the extent Turnbull and Morrison resist pressures for an ‘economic hard right turn’ then that is welcome.

Some Budget changes do appear at the least superficially ‘Labor-esque’.  Many of the billions in cuts and savings originally proposed in the nightmare 2014 Hockey Federal Budget are laid to rest permanently here. The increase to the Medicare Levy will be welcomed by many, and will help provide for the NDIS. (National Disability Insurance Scheme)  The Government claims a ‘$56 billion shortfall’ for the NDIS ; though most of that could have been made up for immediately by jettisoning the Government’s $50 billion in planned corporate tax cuts over 10 years.  (much more over time) $8.2 billion will be taken via the Medicare Levy increase over the first four years.  

A so-called ‘Google tax’ targeting corporate tax evasion is also expected to net more than $3 billion over four years.   (though it is quite insignificant compared with corporate tax  cuts elsewhere)

Further, the ‘big banks’ (including CBA, ANZ, Westpac, NAB) will be hit for $6 billion over 4 years ; apparently including an effective payment in return for the ‘government guarantee’ for the sector. (which began with Rudd’s response to the Global Financial Crisis)   In response there is the question : will the banks hit customers or will they hit shareholders?  If somehow larger shareholders could be targeted that would ensure the most equitable outcomes.  A payment by the big banks in return for an effective government insurance policy makes sense.  Without it ultimately there could be impositions on workers, citizens, tax-payers.  So on this front at least the Government is doing the right thing.  And if the Banks respond by upping fees and charges arguably the co-operative and mutualist sector could ‘step into the breach’.   Were the Commonwealth Bank still in public hands then assuming a ‘competitive charter’ it could have held the rest of the sector accountable , countering tendencies to pass costs onto consumers.  That’s also a good reason for Labor to consider restoring a public-sector bank – perhaps taking advantage of existing Australia-Post infrastructure.

Meanwhile, foreign home owners who leave properties vacant six months or more will be taxed – a measure apparently borrowed from the Andrews Labor State Government in Victoria.  As well as raising some revenue, this measure should also influence investor behaviour ; and effectively increase available housing supply ; with downwards pressure on housing and rental affordability. 

The ‘Gonski 2.0’ measures, meanwhile, are a significant improvement on past Liberal policy, and include needs-based funding.  David Gonski is due to present another report by the end of the year.  The Catholic sector appears to be in the firing line.   More broadly, Shorten points out that despite the gains, here, (including some cuts to some of the richest private schools) the proposals nonetheless still involve an overall $22 billion cut to the sector over ten years compared with the deals previously negotiated by Labor. 

Other constructive policies include significant tax breaks for ‘empty nesters’ to ‘downshift’ to smaller, lower-maintenance accommodation.  That could also increase effective housing supply.  The housing bubble will eventually deflate (or ‘burst’ disastrously). But government could step into the economic breach with public housing.  There is still the need to expand supply to meet underlying human need.  Planned Negative Gearing and Capital Gains Tax reforms from the Government are welcome, but do not go anywhere near far enough, saving just $1.6 billion over 4 years . Stronger action on Negative Gearing is necessary to lessen competition between first home buyers and investors , correcting the Housing Bubble over time.

Also there’s $10 billion for rail as part of a suite of infrastructure commitments. (though these are not as significant as some think when compared relative to infrastructure investment under a ‘traditional’ Labor Government)    

A once-off payment of $75 for singles, $125 for couples – to assist with energy costs – is very insignificant when you consider the rising cost of living.  The Liberals point to renewable energy as the alleged ‘culprit’ here ; but what of privatisation? 

Finally ;  Annual TV Licenses are scrapped in favour of a much lower ‘spectrum fee’ – which makes sense given the changing media landscape – which is hurting traditional media. Arguably the licenses aren’t worth as much anymore.  But diluting media ownership laws will still enable the likes of Murdoch to dominate traditional media.

The Down-Side

But there’s a very significant ‘down-side’ to this Budget as well ; including ‘traditionally Liberal’ attacks on vulnerable groups ; and treating tertiary students like ‘cash-cows’.

Higher Education stands to lose almost $3 billion a year – with students hit hardest.  The Turnbull Federal Liberal Government claims that its fee increases – and its reduction in the minimum repayment threshold to $42,000 a year (down from $55,000) “better reflects the lifetime benefits reaped by higher education graduates”.  But these measures will start ‘kicking in’ affecting people on approximately half the average wage.  Hence in places the measures really bear no relation to any alleged private financial benefits for students. The logic behind these measures also neglects entirely the gains by business and society at large from a more highly educated populace.   There is some progressivity as those with much higher incomes will repay at a significantly higher rate.  But this does not excuse or make up for a 7.5% average increase in tuition fees.  In response Labor needs to raise the threshold somewhere much closer to the average wage ; and higher over time ; while entrenching a progressive scale in the rate of repayments.   Exceptional groups such as the disabled should probably be forgiven their debts, here : or at least have them frozen. The inevitable effect of this will be to deter many poorer students from study, reducing the nation’s pool of ‘human capital’ over time, and impacting on ‘equal educational opportunity’.  It is dubious at best to consider educational investments a ‘bad debt’.

The 0.5 per cent increase in the Medicare Levy is supposed to reassure voters that Labor’s warnings on health are only a ‘scare campaign’.  But while the Levy is re-indexed the forsaken increases to Medicare’s coverage in recent years are not made up for.  Medicare might still be eroded by stealth ; and that is ‘de-facto privatisation’ in the sense of intermittently eroding the coverage of ‘socialised’ public health proportionately.  This was always what Labor alluded to , but for some reasons ‘the waters were always muddied’ in the mass media, with throw away lines like ‘Mediscare’.

Also , while the Medicare Levy is rising, the 2 per cent Deficit Levy is gone – directly benefiting the wealthy in the final balance. There are ‘traditionally Liberal’ distributive  outcomes, here, despite claims of the Budget being ‘Labor Lite’.   (that is, the Budget favours the wealthy) 

Payroll tax on foreign workers will also be replaced with a levy of $1500 to $5000 per employee raising $1.2 billion over four years “to improve Australian workers’ skills”.  To an extent this will take some of the wind from Labor’s sails on related issues. 

Other measures include punitive attacks on the rights of the  unemployed, with the threat of payment suspension for those who miss a job interview or refuse a job offer they don’t want.  And reversion to a ‘cashless welfare card’ for anyone found to have illegal drugs in their system.  5000 people will by thus tested – and effectively humiliated – in order to create a ‘Trojan Horse’ for the introduction of cashless welfare.   Already Australia has one of the most negligent and punitive unemployment benefit regimes in the advanced capitalist world.  But ‘cashless welfare’ will see Australia revert to Depression era ‘Susso’ style ‘payments’.  The ‘Susso’ basically provided threadbare material subsistence (rations and vouchers) for the long-term unemployed.



Conclusions

Claims to the effect this Budget is ‘Labor Lite’ do not really stand up in the longer view historically when you consider pre-1980s relativities on the Economy ; and more recently with the ‘relative economic centrism’ of former Liberal leaders like John Hewson. The reality is ‘convergence’ on right-wing, economically Liberal policies ; though Shorten has begun to ‘break away’ to something more recognisably ‘left of centre’. Ironically,  the “Abbott Purists” will likely claim the austerity has not gone far enough. Though they may be upset by the attacks on Catholic education.  But it is THEY who have abandoned ‘traditional Catholic Centrism’ on welfare, labour and the economy.  (a tradition which interestingly had parallels with other ‘Christian Democratic’ parties in Europe)

This government is restrained by its own inflexible “small government no matter what” Ideology.  (spending is set at no more than 26 per cent of GDP ; well below the OECD average)  This drives various ‘cuts to the bone’ (as Gillard would have put it) , because it leaves no other option than harsh austerity.  Ultimately, Scott Morrison will have to make a choice: real people or Economically Liberal ‘small government’ Ideology.

Terry McCrann of the Herald-Sun calls the Budget ‘a disgrace’ for not sufficiently addressing government debt.  And Jeff Whalley (also of the Herald-Sun) argues that government debt amounts to “$375 billion” or “$15300 for each man, woman and child” .   But while government spending can have a positive ‘multiplier effect’ on economic activity,  austerity also has a negative multiplier effect ; dragging the broader economy down in sympathy.  

Also we must remember  that private household debt is the much bigger problem, and is connected with falling real wages.  (Why the cuts in Penalty Rates, therefore, we might ask! ; which will lead to lower tax revenue also)  And reducing investment in PUBLIC owned infrastructure presents its own associated problems of passing inferior cost-structures on the broader economy. Indeed, investments in some services (eg: Education) and infrastructure add to productivity – and the public sector (natural public monopolies) can often do the job more efficiently.  So Morrison’s ‘good debt’ and ‘bad debt’ has some substance. (a pity in the past they did not apply those principles to Labor governments!)

In conclusion ;  The Herald-Sun reports with an air of alarm that taxes will be up $23 billion over four years ; and spending up $15.7 billion over four years.   Indeed, Commentators are complaining that income tax is becoming more significant proportionately.  Though really, this need not be a problem if total income tax is progressively restructured, and also the rest of the taxation mix.   Also keep in mind the economy is worth approximately $1.6 trillion.  So in reality spending is up by less than a quarter of one per cent of GDP.  The revenue gap has at least been appreciably narrowed.

In some ways this Budget is better than we might have expected from the Liberals after the horror Hockey ‘Lifters and Leaners’ Budget from 2014. But a lot of that Ideology is still there.  And the cuts are still significant ; with the introduction of ‘cashless welfare’ setting a precedent for the further future humiliation of job-seekers.  And shutting many lower-income Australians out from Higher Education.  An Opposition with strong, traditional Labor policies on distributive justice can still ‘outflank’ a Liberal Government which cannot help but govern primarily in the interests of its core constituency: the unambiguously well-off.

Budget 2013: An Analysis of Labor's Budget, and of Abbott's reply

 

above: Treasurer Wayne Swan has delivered a Budget that could have been worse; but also could have been better. 

In the following article Tristan Ewins examines the pros and cons of Labor's 2013 Federal Budget. Labor's timidity in key areas of reform (eg: superannuation concessions) is confusing given its willingness to withdraw benefits from some low and middle income demographics.  But there are some very good policies here as well - even though Gonski has been 'watered down'. Nonetheless, there are clear divisons between Labor and the Conservatives; and hopefully these will be cast into greate relief as the election draws nearer.

Tristan Ewins

The 2013 Federal Budget was neither what it could have been, nor what it should have been.  Labor faced an unenviable task with a $60 billion revenue shortfall over four years- linked with the high dollar, declining terms of trade – and wavering business profits as a consequence.   This impacted on Company Tax receipts especially. Reduced revenues from the mining and carbon taxes certainly didn’t help either; though Labor was too timid or too pragmatic to restructure and revivify either. 

Labor had options – which we will discuss later – to bypass austerity entirely while actually better containing the deficit. But they chose not to go down that path for fear of ‘getting on the wrong side’ of vested interests.  On the good side, Labor did decide to limit austerity.  Cuts have not been so severe as to lead to a European style scenario of negative growth and mass unemployment.  For this (parts of) ‘the business community’ are happy: as increased consumption power is in their interests (or at least for those focusing on domestic consumer markets), even though business tends to oppose social welfare as a rule.   (in order to ‘make room’ for further tax cuts that add to their bottom line)  The overall dimensions of this Budget include cuts of $6 billion over four years and increased revenue of $29 billion of the same period.

First we will summarise Labor’s cuts in more detail.   

Decreases in Medicare coverage will hurt some on low incomes and represent a step in the wrong direction.  And while changes to superannuation will reduce concessions for the richest of all and bring in $800 million over four years – this is not anywhere near what was necessary – or what was possible if the government had targeted a broader base of genuinely wealthy Australians.

Higher Education cuts are in the vicinity of $2.3 billion.  The worrisome truth, here,  is that having locked itself in to a policy of small government and low taxes the Government  decided to reprioritise rather than provide new money in order to fund something anything like what the Gonski review had recommended.  The result of was the sacrifice of university scholarships valued at $2000 – which were transformed into ‘loans’, as well as the rescission of options to repay HECS (Higher Education Contribution Scheme) upfront at a 10 per cent discount.  The latter will mainly affect reasonably secure families – as for the disadvantaged upfront payment could be unmanageable in any case.  But the $900 million ‘efficiency dividend’ will put pressure on the wages of academics and other education professionals, while perhaps resulting in more course closures.  There are already predictions that Sydney University will be required to slash $44-$55 million, while Wollongong University has predicted $14 million in cuts and foreshadowed further staff reductions.

Not just middle class welfare, but middle income welfare (as Tim Colebatch argues) is set to go.  This is classic Labor policy –at least since the Hawke years: making do with less through extensive and narrow targeting of welfare.  But some of the cuts are regressive.   Here it is interesting that Labor has chosen to crack down on welfare  for those on average incomes, but shied away from reducing superannuation concessions for the top 5% or 10% income demographic – which alone could have taken care of the deficit – bringing in between $10 billion and $20 billion.

So Labor has not quarantined ‘middle income Australia’ from its cuts.  But by some analyses  middle income is not the same as middle class.  Surely more reforms aimed at recouping revenue from the top 10% income demographic would have been fairer – though the reality is that we need a broad enough tax base to bring in the necessary revenue to maintain health, education, welfare, infrastructure etc.

Family Tax Benefit A – intended to assist in child rearing - has been also targeted.  The Costello-erea ‘baby bonus’ has been wound back.  Low income groups who would have benefited from carbon tax compensation will also find that some of that compensation – in the form of tax cuts – has been withdrawn.  (a more regressive decision) This is disappointing because regardless of the fact of a falling carbon price with moves to a ‘market carbon trading system’, progressive changes to the tax mix would have been of great benefit to workers and the poor in any case.  

Notably the policy of mandatory detention of asylum seekers – supported by both the major parties – has itself resulted in a blowout of over $3 billion.  But so long as Abbott plays the fear card on refugees Labor can be expected to emulate Coalition policy in order to neutralise or minimise any political benefit.

Now for a range of other policy initiatives – some of them quite welcome.  Although many of them have not been taken far enough.

An increase to the amount of money that those deemed unemployed can earn in casual labour before their benefits are effected has risen by about $20 a week. This is a good initiative: but not going far enough; and not lifting the unemployed out of dire poverty.  (which in principle is supported not only by welfare organisations, but even by elements of the business community.)  A $50/week increase in Newstart remains an urgent priority.

There have also been boosts for cancer research and treatment, and a scheme to assist seniors to ‘downsize’ their home  - moving into smaller and more “manageable’ residences is very welcome.   This is welcome; but further progressive action could involve the removal of taxes such as stamp duty  from low-income  Australians also wanting to move in to cheaper accommodation.  Stamp duty is a state tax; but the states could be encouraged to implement such a policy in return for compensation from the Commonwealth.   

Labor is promising public money for transport infrastructure – but probably much of this will be in the form of Public Private Partnerships.  It is likely, therefore, that some new projects will take the form of toll roads and the like.  This is likely to have  a regressive distributive effect.

Though hopefully  the decision to invest $4.6 million in “an institute for ageing” could lead to more robust and fair aged care policies into the future.

And importantly – Labor is recouping $4.2 billion over four years by closing business tax loopholes – certainly a more welcome initiative than further austerity.

But Labor’s big policies remain disability insurance and the so-called Gonski reforms.

According to ‘The Age’ (May 15^th 2013)  - when fully implemented by 2019-20 disability insurance will have  a price-tag of about $22 billion – covering over 450,000 disabled Australians.   In order to provide funding there will be a 0.5% increase in the Medicare Levy – though arguably more robust action is necessary on the tax reform front to fund  the program over the long term.   These increases to the Medicare Levy are welcome, though further progressive tax mechanisms to provide funding would have been more welcome.

The government is set to provide 50% of the funding for the NDIS (renamed Disability Care Australia) – though when combined with the education reforms it is doubtful that the states can afford this without further federal grants – or further state-level ‘reforms’ – with user pays infrastructure, or increased state taxes.  Disability insurance is a massive and overdue reform – providing support, amenities and services to some of those who are in the most need.  But even the Liberal states had been arguing for tax reform in order to consolidate their fiscal position. (though of course they were Ideologically driven to demand a regressive increase in the scope and coverage of the GST, rather than fair reforms elsewhere in the tax mix)

The Gonski reforms have also been dramatically watered down.  Though nonetheless they remain substantial.  While originally the Gonski Review called for an increase in funding of $6 billion a year, the government is promising only $9.8 billion over six years.  Some money will be redirected from other schemes, and again there is the expectation that the states will ‘come to the party’.  When combined with projected State funding the Commonwealth expects total funding of $14.9 billion over six years – compared with the initial vision to expand education funding by more than twice that amount.  The changes to the funding mix are apparently more progressive, however, with loadings  targeting the inclusion of students from disadvantaged backgrounds –whether the consequence of poverty or disability.

The Abbott response

In response to the Labor Budget Abbott talked of a “Budget Crisis’ created by ‘Labor mismanagement.’  This might go down well with some people who don’t want to scratch far beneath the surface.  But the reality is that the high dollar has been central to the Budget’s deteriorating position.  And for Abbott’s part he shared the position of not intervening to lower the dollar in order to mitigate poor terms of trade, and the disaster for manufacturing.  Arguably intervention is warranted in exceptional circumstances.  And furthermore, Abbott’s opposition to a more robust mining tax deprived the government of the funds that may have been employed to effectively subsidise affected industries in manufacturing and tourism especially – keeping them viable until the end of the mining boom, and a drop in the dollar.  This was important to prevent skills and capacities being lost over the long term.

Abbott and the Conservatives have also been complaining about Labor’s ‘out of control spending’.   And they are talking about a ‘simpler’ tax system – which almost certainly translates into more regressive flat taxes –(eg: an expansion of the GST, and its extension to food) with a redistribution of wealth from the real ‘battlers’ to the affluent.  Here, the Australian Conservatives are taking a leaf out of the extreme US Tea Party’s book.   And for Abbott it is a betrayal of his Democratic Labor Party past.   While the DLP sabotaged Labor for years, and were not a friend of Labor,  they were not neo-liberals and believed in social welfare. But Abbott will say and do anything to get the ‘top job’.  The Americanisation of Australian politics is a real threat:  and the Liberals seem to see the US ‘ideal’ of harsh social stratification as something to aspire to and emulate.

Also, Abbott’s rhetoric proves to be hollow when subjected to scrutiny. As Tim Colebatch points out (The Age, May 15^th 2013) “Revenue this year is forecast to be 23 per cent of GDP, compared with the Howard Government’s post-GST average of25.4 per cent. And spending levels are pretty much identical.  And amazingly - in Melbourne’s ‘Herald Sun’ Jessica Irvine was allowed to make the observation that Labor “inherited a structurally flabby Budget from the Howard Government, with too many cash handouts and unsustainable tax cuts.”   And:  “The Budget would be in surplus today if personal income tax rates had not been cut [under the Howard Government) eight years in a row.”  (Herald-Sun, May 15^th, 2013) 

Why is Costello’s record therefore not examined more rigorously?   On the Howard/Costello watch the housing bubble rendered home ownership an impossible dream for many.  The privatisation of Telstra left subsequent Labor governments in a position of having to ‘pick up the pieces’ and pay a high price for access to Telstra infrastructure for the NBN. The benefits of the mining boom were squandered with unnecessary middle class welfare and unsustainable tax cuts.

Abbott has also attempted to rationalise his Parental Leave for the wealthy scheme by comparing it to annual leave.  There is a significant difference, however.  While many Australians only get 2 weeks annual leave, Abbott’s scheme will provide SIX MONTHS leave on FULL PAY for professionals earning $150,000/year.  True, Abbott is sourcing the funds from a levy on big business – But the money could be prioritised for areas of greater need.  The ultimate effect is a redistribution from more vulnerable groups to the wealthy – as Abbott’s largesse with Parental Leave will be mirrored by austerity elsewhere.

Other projected Abbott policies include more punitive welfare in the form of Work for the Dole, and the removal of the Newstart  (threadbare) ‘safety net’ entirely for under 30s.  A layer of desperately unemployed – a ’reserve army of labour’ – will undermine workers’ organisation and bargaining power.  And perhaps for the Conservatives that is the point!

We can also expect an inferior version of the National Broadband Network; as well as assaults on the rights of labour including organisational rights; cuts to welfare; and the rescission of superannuation co-contributions for low income workers. 

Abbott is still maintaining a 'small target' strategy; and most of the media is providing precious little scrutiny.  Should he attain government, the austerity could well extend further than even this author supposes!

Lessons for Labor

There are several areas in which Labor could have taken a proactive stance – minimising the deficit, preventing austerity and actually expanding the social wage.

A more rigorous mining tax could have brought in perhaps $6 billion. Reversion to 75% Dividend Imputation could have recouped perhaps another $6 billion – or perhaps $12 billion if reverting to 50% as once advocated by renowned Australian economist John Quiggin.  Restructuring income tax should also be an option; as should a tax on inheritances over $2 million.  Cutting superannuation concessions for the wealthy and the upper middle class could have captured between $10 billion and $20 billion.  Talk of ‘taking pressure off public pensions’, here, is a furphy – as superannuation concessions alone are now costing more than the entire Aged Pension Budget.  Again: we have a policy redistributing money from ‘battlers’ to the wealthy.

Arguably Labor’s timidity was unnecessary.  The government is withdrawing payments from low to middle income groups – but somehow thinks it could not have raised further revenue from the top 5% to 10% income and wealth demographics.  Why back away from such reforms when they would target only a wealthy minority; and when they would provide the scope for massive expansion of Australia’s social wage and infrastructure – the benefits of which should be plain to voters?

Also importantly – Labor could have mimicked Abbott on one crucial point: his 1.5% levy on big business.  Abbott could hardly have complained given his own policy, and Labor could have directed the money into areas of much more acute human need – for instance, aged care.  It is still not too late to develop just such a policy and seek a mandate for it at the coming election.  Such a policy could well be very popular!

With perhaps over $30 billion from such initiatives-  that is, were they all implemented to the fullest extent – a surplus may even have been achieved for the coming year.  Though that would be a political objective; as in reality the precariousness of the world economy demands a more fiscally expansionist stance.   Gonski could have been implemented in full.  And comprehensive Aged Care insurance could have been rolled out on similar principles to Disability Care Australia.  Finally, resources could have been provided for the States – maintaining health funding; maintaining equity in provision of health services; providing further resources for public transport and other infrastructure without regressive user pays mechanisms or even privatisation of roads…

Policies of ‘small government’ will only lead to more Public Private Partnerships, and perhaps outright infrastructure privatisation for which consumers will pay the price. 

Instead, Labor should go to the election heralding further action on the social insurance front.  And while following through with its education and disability reforms, Labor must promise a multi-billion dollar annual investment (new money) for Aged Care services.

Indeed it is not too late for Labor to further re-emphasise social insurance as a central theme for the election.  If Abbott could be pressed to accept disability social insurance, the right kind of articulatory strategies by Labor could drive him to accept Aged Care insurance as well.  If Labor loses the election – but manages to dictate the policy agenda in such a manner – then even in electoral defeat it would comprise a kind of victory. The suffering of our aged citizens – especially those in high dependency care – is an obscenity to the extent it could be ameliorated – but is not – because of ‘other priorities’.   I have argued for such action in previous articles here – and for any who have not read this material yet I urge them to read the following:

http://leftfocus.blogspot.com.au/2009/02/another-look-at-aged-care-crisis-call.html

Again: There is relief that (in Julia Gillard’s words) Labor “has not cut to the bone”.  But the Budget is not all that is could have been, nor what it should have been.   Failing to extensively reform superannuation concessions was the key capitulation in the face of vested interests..  Hopefully, though, Labor will press the themes of tax reform , social insurance and social wage expansion further in the following months, and seek a mandate for progressive change.

Labor's 'last best chance' to prevent a 'downwards spiral' of austerity

 

above: As Finance Minister Penny Wong is well-placed to attempt to 'head off' any strategy of unnecessary austerity for Labor's May Federal Budget. Penny, Please stand up for what it right!

Tristan Ewins

Dear Readers:  I wrote the following after the government’s announcement that it was cutting back higher education funding in order to pay for a much-reduced version of the Gonski education reforms in the May Budget:

As to what is determining Labor’s behaviour – I think there was an element of cynical opportunism when it came to Sole Parents.  (playing on peoples’ prejudices – but ultimately causing more self-harm in the process – by losing credibility with parts of its base… )

But on Gonski I think it’s a bit more complex.  I think – as a friend of mine said a short way back – that Labor is ‘curling up into a ball’ in the face of attacks from powerful vested interests.  Hence the collapse on superannuation concessions – ie: tax shelters for the rich; on the Minerals Resource Rent Tax; and now the retreat on Gonski. 

It seems they would rather compromise their core ‘signature’ policies then take on the powerful and wealthy vested interests…  And what they don’t seem to grasp is that this does not win respect over the long term.  It only makes our adversaries more confident, brazen and aggressive in their attacks on what remains of the welfare state, the tax-transfer system, the social wage….  IN short – If we never fight -  It means we almost completely lose control of the discourse over the long term.  We all but completely lose control over the definition of the prevailing ‘common sense’ on everything from tax to industrial relations, and social expenditures, infrastructure and welfare…  The Conservatives get their way no matter which party governs….  Failure to defend social justice, progressive taxation, the principle of redistribution  - will mean the self-liquidation of Australian social democracy unless someone else steps into the breach.  And the Greens could not achieve that on their own either.

But that said there IS progress for state education if Labor’s policies go through….  The means of paying for it are regressive; But it is still a more progressive overall outcome than what we already had…  Students – including students from low income backgrounds – will have to repay ‘start-up scholarships’.  This is bad.  Though it is mainly students from higher income backgrounds that will lose out from the decision to prevent them paying their HECS fees up-front.  And at least repayment will be deferred.   (the obvious question now being where the repayment threshold is set) 

Regardless, though, it is a Positive-Sum Affair for disadvantaged students taken overall  – many of whom would never enjoy the opportunity of tertiary study were it not for this re-ordering of priorities.  Hence additional resources for indigenous, disabled, non-English speaking and poor-literacy students – and the ‘Lion’s Share’ going to state schools.

In short – this policy could also be crucial in stemming the drift of students to private schools to the point of ‘critical mass’ – where otherwise the state sector would become permanently second-class and residual.  The policy inflicts an injustice on tertiary students –but will provide opportunities for many who otherwise would never have a hope of a tertiary education; or even of making the most of Year 12.

The policy involves about half the resources that Labor originally promised, also.  Much is expected of the States given their finances.  The States should not be obstructionist – or blur the issues.  But while they are low on cash themselves – the logic of events could lead to user-pays infrastructure inflicted on us by the State Governments.  The states should promote the cause of federal tax reform to make all this unnecessary  – but it seems they are only interested in increasing the GST and removing exemptions for food  – as today’s conservatives  seem to ‘believe in principle’ in flat taxation that hits the poor hard.   Apparently this Ideology is not “class warfare” but anything else even mildly progressive is...

All this also begs the question what is going to happen to the National Disability Insurance Scheme (NDIS).  Tony Abbott says he supports it.  But Of course he will have no problem ‘neutralising’  the issue by paying for the program with savage austerity against the apparently ‘undeserving’ poor – for example the unemployed; and possibly against mentally ill recipients of Newstart deemed able to do ‘some’ work.  Where Labor would get the money from is anyone’s guess.  But with a price-tag in the vicinity of $15 billion/year to implement the policy I am afraid we are going to ‘squib’ the issue again by only half implementing the policy; and projecting full implementation into a distant future that may never come.

Labor would be more credible if they stood up on these signature policies even if it means abandoning the idea we can have a ‘Positive Sum Affair’ FOR EVERYONE.  Again this is the myth cultivated with the whole ‘social justice equals class warfare’ discourse. ( ie: that ‘the state should get out of the picture’)   This is sold as a liberal principle and ironically it exploits past Australian egalitarian traditions and self-image.  But in fact this discourse rests firmly on the interests of the wealthy; who seek to divide us all against each other on the basis of an economically Liberal Ideology, ‘downwards envy’ and other prejudices.

THAT outcome (ie: squibbing on NDIS) is what we need to agitate and mobilise against as the 2013 May Federal Budget approaches.  Without an assertive, confident and progressive Labor the task will become all the more difficult for the government, and  Labor will not be able to inspire activists, trade unionists, environmentalists into the kind of on-the-ground campaigning which alone can counter Abbott’s advantage of uncritical and biased monopoly mass media coverage . It could actually be a more difficult task, in fact, than had they stood up to the vested interests in the first place.

Finally: now that we have ‘squibbed’ on the issue of superannuation concessions even centre-left commentators like Tim Colebatch are arguing that significant austerity cannot be avoided.  But let’s be clear: Compared to other OECD countries we have small government in Australia.   By some estimates removing ‘middle class welfare’ could save a few  billion; but this pales in significance to the money that could be saved by winding back superannuation concessions for the top 5%-10% income demographic, and by reducing dividend imputation – just for a start.  Instead  of conceding the logic and the agenda of austerity rather Labor and the Left need to go on to the front foot and move towards an extension of social welfare for the most disadvantaged and the most vulnerable….  Aged Care is perhaps the most vital area where action is necessary – when one considers the regressive nature of existing user-pays mechanisms – and the sheer extremity of the human suffering by these amongst our most vulnerable citizens….

Tony Abbott apparently has a Democratic Labor Party background if you trace it back far enough…  And while the DLP and the NCC did untold damage to the ALP during the years of the split, you would at least expect from them a  ‘Catholic social welfare’ outlook with a measure of compassion for the poor.  Some have commented that towards the end of his life B.A Santamaria realised that in facilitating the neo-liberal hegemony the DLP did more damage to its cause then had ever been inflicted on them by the Left.   And now Abbott himself promises to be the bearer of previously unheard of austerity.    

It is not only Labor that needs to search its conscience when it comes to the treatment of the vulnerable, including Sole Parent families.  Abbott could have used his leadership of the Liberal Party to lead it down the path of ‘compassionate conservatism’ after the fashion of the immediate-post-war German Christian Democrats.  Instead the disabled and the unemployed stand to suffer, and one can only speculate where else the axe may fall when it comes to further austerity in the Ideological pursuit of ever-smaller government.   The American-style rhetoric against practically any and all social investment is incessant – with no regard for the human consequences when the time comes to put this rhetoric into action…   The rights of the Aged don’t seem to be ‘factoring in’ with either of the major parties, and nor do we hear much from the Greens on that issue as well.

For both Abbott and Labor – Search your consciences when it comes to austerity and the rhetoric of  small government.  Neo-liberalism is not the proper ideology of Labor and social democracy, and nor is it the proper Ideology for compassionate Conservatism with a Christian ‘social welfare’ outlook.

For Labor’s part it is not too late for a mix of tax reform and reprioritisation of expenditure that avoids austerity against the vulnerable.   There is the potential mix of MRRT reform, reduction of dividend imputation, and winding back of ‘middle class welfare’ – that combined could bring in maybe $15 billion a year.  Reform of superannuation concessions has been ruled out for this year – but must factor into our plans for the future.

We have a choice.  Only a progressive ALP can inspire and mobilise its core base and potentially sympathetic social movements.  The May Budget is perhaps our last best chance to achieve this.

For details re: Labor’s Tertiary Education cutbacks see:  http://www.afr.com/p/national/education/extra_bn_for_schools_under_gonski_tFWyWqxCXfag4O1BvsOkMJ

A Final Plea for Federal Labor and the May Budget: Progressively Fund Gonski and NDIS – and No More Austerity!

 

Above:  A message for Bill Shorten -  Please do whatever you can to lock in funding for Gonski, and for the NDIS which you were instrumental in championing;  And Please do not do so at the cost of further callous austerity as in the case of Sole Parents!

 

In the following article Tristan Ewins argues that Labor needs a credible narrative on NDIS and Gonski - with progressive funding mechanisms 'locked in'.  He argues that it is an Abbott government which would really 'divide Australia'; and again that reform of Superannuation Concessions for the top 5% or 10% income demographic are key to delivering on Labor's Social Insurance, and educational 'equal opportunity' agenda.

 

(nb:  Just in April 5th:  Bill Shorten confirms that about 16,000 wealthy Australians will be targeted - those with superannuation incomes over $100,000 a year (ie: superannuation savings of about $2 million or more) - bringing in about  "$350 million over the forward estimates period."  (now the ABC is reporting a higher figure of $900 million; but SBS says that's 'over four years')  The question is STILL - where is the rest of the money ($20 billion or more) coming from for NDIS and Gonski?  At Facebook Richard Denniss is calling the decision 'pathetic'.  PLS read on - and your comments and ideas are welcome here!)


by Tristan Ewins

Increasingly Coalition rhetoric in Australia emphasises what it labels the ‘divisive’ nature of Labor policies. Abbott poses as the bearer of conciliation; of ‘good government’; of a ‘traditionally classless’ Australia where issues of distributive justice never even come in to the ‘national conversation’.  Of course the old egalitarian Australian ethos rested on labour movement traditions: on a strong labour movement, and far-reaching industrial relations regulation. But as far as Abbott is concerned ‘why let the truth get in the way of a good story’?

In fact, the person with a ‘plan’ to divide Australia is Tony Abbott.  The Abbott ‘plan’ is to create ‘two Australias’: divided on the basis of the quality of health care, education, aged care, child care, parental leave and transport infrastructure that citizens can afford or otherwise enjoy.  Quite likely, the Abbott ‘plan’ is to entrench these divisions to the point where they become permanent. That is - to the point where the Conservatives ‘capture’ a vital ‘middle demographic’ which develops an economic self-interest in the withdrawal of welfare and social wage mechanisms for the less-well-off, and including the end to all pretence of ‘educational equal opportunity’.  Further down the track there is the potential prospect of that ‘classic Thatcherite mixture’ of labour market deregulation and ‘trickle-down’ economics; resting upon the development of a permanent layer of exploited and politically disengaged working poor. The ‘Abbott plan’ would also almost certainly mean that user pays mechanisms – and potentially privatisation - are applied to make up again for budget shortfalls. Ordinary workers would also suffer the brunt of such attacks. 

Labor needs to differentiate itself from Abbott at a fundamental level.  Labor’s commitment to Social Insurance must mean socialisation of risk regarding health care, aged care and disability care – providing real social security for all Australians and their families. It must mean collective social consumption in these areas to provide the best value for all.  And socially-financed infrastructure needs to avoid the drawbacks of privatisation and regressive user pays mechanisms.  Labor needs to generate a winning narrative along these themes.

But while quality public education, as well as collective consumption and social insurance are in most peoples’ interests, such policies come with a price.  With that in mind I return again to the question of superannuation and tax reform –  concerned that in the face of another ‘fear campaign’ Labor may be on the verge of ‘losing its nerve’ before the May Federal Budget.

In ‘The Age’ today - April 4^th 2013 - this writer was concerned to hear that Labor Minister for Superannuation, Bill Shorten claimed that changes to superannuation concessions would not be adverse to people earning “up to four times the average weekly wage”.  That is in the vicinity of or over $250,000/year if applying to full-time work; or according to the Herald-Sun on April 2 – around ‘the top 1 per cent’.  Though if including part-time work as well the figure would be much lower – ie: closer to $200,000/year. 

Referring to a paper written by Labor MP Andrew Leigh from 2006, Matt Cowgill pointed out in ‘The Drum’ in 2011

“only 4.5 per cent of Australian adults have an income that exceeds $100,000 per year, and only 1.5 per cent have an income that exceeds $150,000 per year.”   (http://www.abc.net.au/unleashed/2614076.html

Those figures are now out of date, but they would remain close enough to the current reality to impart some idea of who are the real ‘battlers’ – as well as who are doing very-well. (and how many of these there really are)

Further: despite claims that millionaire status ‘does not mean what it used to mean these days’, studies by the Australian Bureau of Statistics from 2011 showed barely 10% of Australians enjoyed a “net worth” of over $1 million.

So do the millionaires really need further tax breaks?  Even when some individuals may face retirement on ‘a mere $50,000/year’, what do we have to say for Aged Pensioners – who have worked their whole lives – now trying to survive on about $20,000/year – and less if treated as a couple?  

By contrast, this author has long argued for superannuation concessions to be removed from at least the top 5% income demographic – which would bring in around $10 billion according to Richard Denniss of the Australian Institute.

Bill Shorten had been instrumental in backing the National Disability Insurance Scheme, and had made no secret of his discomfort regarding austerity against Sole Parents.   Yet Shorten now appears to be going significantly further than Labor MP Joel Fitzgibbon’s concern for his constituents in the mining industry earning a ‘meagre’ $140,000/year. 

And let’s be clear: Even in the ‘Herald-Sun’ on February 9^th 2013, Karina Barrymore observed that the average final superannuation savings for women was only $112,000 – and $192,000 for men.  

Genuine ‘battlers’ cannot afford ‘welfare for the rich’ in the form of massive tax breaks for people who can save more money in a year than others can aspire to save in a lifetime.  And these are tax breaks which discriminate against average working Australians – who simply don’t have the spare income to divert in to superannuation tax shelters.  Such tax breaks come at the cost of the infrastructure, services and welfare upon which the vast majority of Australians depend.  In a sense it is ‘class warfare’, yes.   But it has been a ‘war of aggression’ against poor and working class Australians: waged in the interests of the wealthy, and in the interests of the ‘upper middle class’ – who find themselves in the  ‘ideological and economic orbit’ of those most wealthy. (Importantly while the upper middle class may not be 'fabulously wealthy' - a term deployed by Craig Emerson - they are certainly very comfortable compared with the vast majority of workers - and quite capable of paying their fair share towards the social good)

Admittedly, though, the position of some mining workers can be ambiguous – as they enjoy high wages – but many depend on their industrial organisation to get a fairer deal from the mining bosses.  Their living expenses can also be higher than average Australians. Many are torn between solidarity with fellow unionists, and a sense of their economic interests as part of a relative ‘labour aristocracy’.

And yes, the chorus of claims of ‘class warfare’ are hurting Labor. There remains an idea of an ‘idyllic’ and ‘classless’ past; and old Labor stalwarts such a Bill Kelty are harking back to the Hawke years of consensus and ‘national reconciliation’.  But comprehensive ‘class peace’ was always chimerical.  Attacks on the wage share of the economy, as well as the social wage and welfare state, and industrial rights – never ended.  Though even former Conservative Prime Minister John Howard himself stated at one point (while still in government)  that he favoured the principle of progressive taxation!  And during the early period of the Accord, on the Left there was not an abandonment of social and distributive justice – but an aspiration to expand social wages as occurred in Sweden.  Yet today distributive justice and a compassionate welfare state are considered ‘unspeakable’: branded as “divisive” and of representing “class war”.

But this is ‘the crunch’. When considered together the NDIS and Gonski  will cost the Budget bottom line in the vicinity of $20 billion. And that is without even considering the huge infrastructure backlog affecting the states, with the prospect of regressive tolls  for new and maybe even existing roads, and insufficient public transport options for many workers to even have a viable choice how they commute to work. 

It is also without considering the plight of our most vulnerable aged citizens: their unnecessarily pronounced suffering as a consequence of insufficient funding for Aged Care; and the highly regressive ‘user pays’ mechanisms that increasingly apply.   

nb: For more comprehensive critiques of the the Aged Care crisis in this country see here: http://leftfocus.blogspot.com.au/2009/02/another-look-at-aged-care-crisis-call.html

And for a more recent critique by this author see here: http://leftfocus.blogspot.com.au/2012/04/talking-about-aged-care.html

NDIS and Gonski in particular have become ‘signature’ Labor policies.  So where is the money coming from?  

And let’s keep in mind: Come September people will be asking the same question of Abbott.  

Labor needs to ensure its ‘signature’ policies are fully costed without further regressive austerity!  This is the precondition for making the most of exposing the radical austerity that will underscore Abbott’s ‘plan’ for Australia.

On March 21^st Jessica Irvine – also from the ‘Herald-Sun’ - suggested a whole suite of potential policies, including an increase to 30% of taxation rates on those on incomes of $300,000 and above.  That apparently would bring in $500 million a year.  (about 2.5% of what is necessary to pay for Gonski and NDIS!)    Perhaps Irvine’s intention was to foster less significant expectations – in order to make ‘root and branch’ reform of superannuation concessions politically awkward and damaging for Labor.

The monopoly media is also attempting to rush Labor into a commitment – perhaps to protect the interests of the wealthy, and to render NDIS and Gonski ‘unfundable’.  Allowing time for further speculation could also be damaging – as it was with the Carbon Tax.  But not nearly as damaging as getting it wrong: dropping ‘signature’ policies, or turning again to callous austerity (eg: Labor policy on Sole Parents) in a ‘Zero Sum’ outcome for Labor’s constituencies.

While ‘The Age’ has generally been giving Labor a much harder time since Gina Rinehart became the most significant individual shareholder in Fairfax, it pretty much ‘got it right’ on the super concessions debate in a recent editorial.  Hence the following:

“The rich can avoid the 45 per cent tax rate on earnings above $180,000 by diverting large sums into super at the same concessional rate of 15 per cent that applies to everyone else. Treasury figures show 37 per cent of the value of concessions flows to the top 5 per cent of earners…”

Super is being exploited to subvert a long-accepted, progressive policy of taxing higher earnings at a higher rate. Super concessions become more generous for higher earnings. The average male retiree, Treasury figures show, gets about $270,000 in age pension payments and tax concessions. The concession alone is worth $520,000 on average for the top earners - well over twice the total average ''nest egg'' of male workers nearing retirement and more than four times their female peers' balance. The top 20 per cent of earners get half the value of all concessions.  

And we reiterate the same point here as made in an earlier article:

“Superannuation concessions are currently around $30 billion, and will cost $45 billion perhaps as early as 2015. And the top 5% income demographic alone is already receiving over $10 billion of those existing concessions.  (See: http://www.abc.net.au/worldtoday/content/2012/s3568235.htm )

Taken proportionately, that would also mean $15 billion in concessions for the top 5 per cent alone by 2015.

Drawing additional revenue from ‘the top one per cent’ quite simply does not target a broad enough base to bring in sufficient funds.  If Bill Shorten and others want to ‘back down’ on superannuation concessions, and other very significant progressive options for tax reform, then Labor’s signature policies are either finished – or they will come at the cost of deep austerity elsewhere.   Even further means testing of benefits such as the Private Health Insurance Rebate cannot bring in anywhere near the kind of money that is required on their own.   The only other possibility is a series of budget deficits: and that cannot be sustained over the course of the whole business cycle either.

While the ACTU at one point was arguing for action to remove superannuation concessions for the top 10% income demographic, this author is again arguing for an absolute minimum policy of removing concessions from the top 5 per cent income demographic. This would bring in about half the money necessary for Gonski and NDIS.  Further tax reform would also be necessary – perhaps of the Minerals Resource Rent Tax – and of Dividend Imputation.  At ‘Crikey’ John Quiggin was on record as supporting an increase in the Medicare Levy to pay for NDIS specifically.

There is no need to make policy on superannuation concessions retrospective – as Simon Crean says concerns him.  But there is the need to make the system sustainable – as Swan, Shorten, Wong and others have readily admitted.   But if Labor will not at the very least remove or very significantly wind back concessions from the top 5 per cent (or more preferably the top 10 per cent)  then the sustainability of superannuation concessions is ‘out the window’.  As quite possibly are Gonski and NDIS.  One way or another Labor needs to exact at least $10 billion for this year – and more in future years - by removing overly-generous superannuation concessions.

Most importantly: Labor needs those improvements provided through such reform - in social services, welfare and infrastructure - ‘on the record’ and cemented in the public consciousness well before the September Federal election.

Australia is a growing nation which demands investment in transport, communications and education infrastructure.  And Australia is an ageing nation – with health and aged care costs set to rise. (with aged care services already grossly inadequate for many – involving untold human suffering) 

NDIS and Gonski demand about $20 billion in new annual funding.  Aged Care requires an injection in the vicinity of $5 billion annually if the government is serious about providing quality of life, supporting Carers and removing regressive user pays mechanisms. Then there is the need for reform of Newstart; and for strong investment in transport infrastructure and health services.  And simply increasing the retirement age shouldn’t be seen as an option for a Labor Party concerned with ‘work/life balance’.

For a long time Labor has proudly claimed the mantle of “small government” – arguing it has held the size of government down proportionately compared even with the governments of John Howard.  This quite simply is no longer sustainable.  If Labor does not expand taxation progressively and very significantly we will see further user pays mechanisms for education,  for health and aged care, and for transport including roads.  Privatisation simply makes matters worse – saving the government’s budget bottom line – but passing increased costs (of administration, profit margins, and finance) on to consumers.

This author would warn Shorten, Wong, Swan and others: There are pervasive elements of the media that will spin everything and anything Labor says and does against it.  But austerity against Sole Parents hurt Labor’s credibility severely. And failure to provide for NDIS and Gonski sustainably would leave the government without a compelling and credible narrative.

We need far-reaching reform of tax and superannuation concessions in the May Budget.  Without credibility on funding our ‘signature’ policies, and a record of delivering on such commitments, Labor will not be in a strong position to capitalise on the sweeping austerity, human suffering and social injustice which would follow an Abbott government.

Labor must not lose its nerve.


nb:  I sincerely hope I am wrong in this article and that Labor does find a way of funding Gonski and NDIS come the May Budget.  I'd be glad to be able to admit I was wrong!